Tower Semiconductor (NASDAQ:TSEM) shares climbed nearly 6% in premarket trading on Monday after the company posted strong third-quarter results and issued a record-breaking fourth-quarter revenue forecast that surpassed analyst expectations.
The specialty chip manufacturer reported Q3 revenue of $395.7 million, slightly above the consensus estimate of $394.97 million and up 6% sequentially. Adjusted earnings per share came in at $0.55, just above the $0.54 forecast. Net profit rose to $54 million, compared with $47 million in the prior quarter.
Tower also delivered robust operating cash flow of $139 million while investing $103 million in property and equipment as part of its ongoing capacity expansion.
Investor sentiment was boosted by the company’s fourth-quarter revenue guidance of $440 million (±5%), well ahead of analyst projections of $434 million. This outlook marks a 14% year-over-year increase and an 11% sequential gain, signaling strong momentum heading into year-end.
“We are in the best position, our core technologies — Power Management, Image Sensors and 65nm RF Mobile — each demonstrating year over year revenue growth,” said Russell Ellwanger, CEO of Tower Semiconductor. “This is an excellent foundation, on top of which our number one position in SiGe and SiPho technologies for optical transceivers, combined with data center surging demand, gives Tower a present and future pathway for unprecedented growth.”
To support this growth, Tower announced an additional $300 million investment to expand capacity and develop next-generation capabilities for its SiPho and SiGe technologies. The company also extended its Newport Beach facility lease, adding up to 3.5 years beyond the previous 2027 term, with annual lease costs averaging $24 million over the five-year period.
The results underscore Tower’s strong positioning in niche semiconductor markets and its ability to capitalize on accelerating demand from data centers and advanced communications infrastructure.